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How to Petition to Limit or Quash an FTC Civil Investigative Demand
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How to Petition to Limit or Quash an FTC Civil Investigative Demand
The Federal Trade Commission (FTC) frequently issues civil investigative demands (CIDs) to companies to obtain information during investigations into potential unfair or deceptive trade practices. If your company receives a CID from the FTC, you have the right to petition to limit or quash the demand. Here is an overview of the process:
What is an FTC Civil Investigative Demand?
An FTC CID is a subpoena that requires the recipient to provide documents, answers to interrogatories, or oral testimony related to a law enforcement investigation1.
The FTC issues CIDs when it has reason to believe a company has violated consumer protection laws or antitrust regulations.CIDs are broad investigative tools that allow the FTC to collect large amounts of information to determine if further action, such as litigation, is warranted 2.
Grounds for Petitioning to Limit or Quash
There are several valid reasons for petitioning to limit or quash an FTC CID 3:
- Relevance – The CID seeks information not relevant to the scope of the FTC’s investigation as defined in its resolution.
- Overbreadth – The CID is unreasonably broad and burdensome given the needs of the investigation.
- Privileged Information – The CID improperly seeks legally privileged information.
- Confidential Business Information – The CID demands sensitive confidential business information unrelated to the investigation.
The Petition Process
To petition to limit or quash a CID, follow these steps:
- Meet and confer in good faith with the FTC staff attorney to try to resolve any issues with the CID informally.
- If issues remain unresolved after meeting and conferring, file a petition with the FTC Secretary within 20 days of being served. Make sure to send a copy to the FTC staff attorney 4.
- The petition should:
- Identify all issues with the CID line-by-line.
- Explain in detail why each request should be quashed or limited.
- Provide applicable legal support.
- Suggest alternatives if applicable.
- An FTC Commissioner will review the petition and either grant or deny it. This decision will be made public on the FTC’s website 5.
- If the petition is denied, you must provide the demanded information by the deadline unless you intend to challenge the denial in federal district court.
Consequences of Noncompliance
If you fail to fully comply with an FTC CID, the agency can initiate a civil action requiring compliance. Continued noncompliance may result in sanctions including civil contempt charges 6.
It is usually in a company’s best interest to work cooperatively with FTC staff to appropriately narrow CID requests rather than outright refusing to comply. Skilled legal counsel can facilitate negotiations with the FTC to reduce burdens while still meeting the agency’s investigative needs.